Oracle has filed its expected Objections [PDF] to Google's $4+ million
Bill of Costs. I have it as text for you. "Denial of costs is proper," Oracle argues, "where (1) the issues were especially close and difficult, (2) the case presented a landmark issue of national importance, (3) the judgment was mixed, or (4) the losing party litigated in good faith."

Here's how it sums up its position in the conclusion:

Because this case involved difficult, landmark legal issues of first impression, resulted in a mixed judgment, and was litigated in good faith, the Court should exercise its discretion to deny costs and require each party to bear its own expenses. If any costs are allowed, (1) Google's request for $2.9M in e-discovery costs should be denied, as Google has failed to separate the reasonable costs of physically copying production documents from the costs incurred for Google's purposes, and (2) Google's request for $986,978 in court-appointed expert witness costs should be denied, as Google agreed to pay those costs, and in any event, the Court should exercise its discretion to deny those costs, given the complexity and novelty of the damages issues and the extreme divergence of both parties' positions on damages.

They have a point, I think. But only in part. For sure, they can claim good faith on the patents they thought were infringed by Google, although one could argue that they could and should have studied how Google's Android works so as to realize Google didn't infringe. Not that I ever think it's all right to sue over patents. But that's the system, so I think that's conceivably a valid position.

It's the "landmark legal issues of first impression" part I can't swallow. Oracle tried to create new law, trying to extend copyright's reach to cover APIs. Not even APIs. The structure, sequence and organization of APIs, no less. A list of them. That means, in this case, Oracle ignored a lot of case law, trying to make copyright cover something it just doesn't in this picture. That swashbuckling legal adventure Oracle, in my view, should have to pay for itself and cover Google's expenses too because of putting them -- and all of us -- through all that for absolutely nothing. If you want new law, go to Congress and get it to write it and pass it for you, not to the courts. Thanks. The public would appreciate it very much. Or if you insist on trying to pass new law via a judge, when the case law is so overwhelmingly against you, as it was here, you should have to pay out of your own pocket for the fun you are having if you fail.

It might discourage extreme claims, and frankly, after the SCO saga and its outrageous positions and now Oracle's doomed claims, both brought by Boies Schiller, I think some curbing of enthusiasm of legal creativity might be helpful to the marketplace. It's too costly for the victims, who get nothing out of it but damage, and that unmerited damage shouldn't be ignored.

That's just my view, though. The judge will probably take Oracle's argument more seriously than I do, just because of how the law of costs works. It's not that APIs can never be copyrighted, after all, the judge ruled. So in that sense, one could argue, as Oracle does, that it was a close issue, with some justification that it really thought these Java APIs fell on the copyrighted side of the fence, even though in the end they didn't.

Oracle argues, again, that the jury partially found for Oracle on the SSO infringement, although unable to reach a verdict on whether it was fair use. The judge then ruled that the SSO was not copyrightable anyhow:

Contrary to Oracle, copyright law does not confer ownership over any and all ways to implement a function or specification, no matter how creative the copyrighted implementation or specification may be. The Act confers ownership only over the specific way in which the author wrote out his version. Others are free to write their own implementation to accomplish the identical function, for, importantly, ideas, concepts and functions cannot be monopolized by copyright.

Again, it would have been better if Oracle had studied more closely exactly what Google did, because perhaps then no litigation on that issue would have resulted. But Oracle argues it was a partial win, and hence no costs should be granted. I would like to remind them, though, that the one juror who talked to the media, the foreperson, the one member of the jury who steadfastly fought for Oracle in deliberations, said that the jury was under the misunderstanding that the judge had told them they pretty much had to find infringement of the SSO, so I can't really see that as the win Oracle says it is. Joe Mullin of ars technica talked to that juror, and it wasn't even close for Oracle, just that they thought the judge had indicated they had to find infringement of the SSO and concentrate more on the fair use issue:

After the copyright verdict, there had been some speculation around the Web that because the jury found that Google infringed copyright—but split on fair use—it was basically a pro-Oracle jury with one or two holdouts sticking up for Google. Talking to Thompson, it quickly became clear that wasn't the case at all. A majority of jurors favored Google's argument from the start, and the holdouts—primarily Thompson himself—were a beleaguered few favoring Oracle. At one point during the copyright phase, in fact, Thompson said he was the lone holdout. At the end, he swung a couple more jurors to his side, but they were still a distinct minority.

As to the jury's finding of infringement, Thompson said that the jury actually didn't debate it that long. The feeling was that the answer to the infringement question—the first one on the copyright verdict form—had basically been dictated by the judge's instructions. (Judge Alsup told the jury, among other things, that they must assume that the Java APIs are copyrighted.) "We felt that the judge's instructions put us a lot of the way towards finding infringement," Thompson explained.

On patents, the jury was 100% agreed that there was no infringement.

No one can convince me that Oracle didn't know that "copyright law doesn't confer ownership over any and all ways to implement a function or specification." Oracle repeatedly designates its SSO claims as important to the industry, a cutting-edge legal matter of national importance. For example, it writes, "The present case involved difficult, novel legal issues of great importance to the computer software industry." I think it would be more accurate to say that the industry reacted with horror to Oracle's claims, viewing them as utterly destructive to the industry should Oracle prevail. That's not really the same thing.

Then on the copyright infringement of such nonsense as a small collection of test files that never even shipped or something as simple as rangeCheck, I don't buy that as good faith, although the court likely will. To me, suing over rangeCheck is like suing an author for using the phrase, 'In the meantime...' in a novel several times, claiming it's a copyright infringement because you wrote that in your novel, and that it cost you millions in damages. It's not a position you can defend to anyone who understands code. It was an utterly insignificant bit of code. And the 9 lines the jury found infringed were 9 lines that Oracle's own damages expert couldn't put a value on. Keep in mind that Google has a pending motion on the 9 lines of the rangeCheck code, asking for judgment as a matter of law that it was de minimis. Still, Oracle did prevail with the jury on that little corner of the litigation, so far, and so it has an argument that it shouldn't have to pay costs on that. Not a good argument when you zoom in on the details -- prevailing on something that was admitted and which has no real value and losing hugely on everything else isn't what I'd normally call a split decision -- but at least an argument that can be made and could even prevail.

To Oracle, it's a split decision:

The jury found for Google on copying of the English-language descriptions in the API documentation and the eight decompiled files, but the Court subsequently directed a verdict for Oracle on those eight files. Although Oracle stipulated to no damages arising from the code copying, Google did remove the copied code from Android as a result of this lawsuit. Judgment was ultimately entered for Google on the 37 Java API packages based on the Court's seminal ruling that the APIs were not copyrightable. With respect to the '104 and '520 patents, judgment of non-infringement was entered for Google, while judgment on Google's invalidity counterclaims was entered for Oracle. (Id.) Judgment was entered for Oracle on Google's affirmative defenses of waiver and implied license. The remaining two defenses have yet to be decided. The mixed judgment in this case supports a denial of costs.

Google removed the code when Oracle brought it to its attention, which is what you do when you didn't mean to infringe. People don't usually sue over that, when it's such an insignificant matter. And so Oracle's putting quite a lot of spin on the ball.

Here's the introduction, where Oracle sets forth its position in summary:

INTRODUCTION

Google seeks costs in the amount of $4,030,669, including what
appears to be the entire expense ($2.9M) of Google's electronic
document discovery vendor and Google's share of the fees of
court-appointed damages expert Dr. James Kearl ($986,978). Oracle
objects to Google's requested costs on three primary grounds:

First, because the key disputed issues concerning API
copyrightability were close, complex, without direct precedent, and
of great importance to the computer software industry, and neither
Oracle nor Google prevailed on all claims in this case, the Court
should exercise its discretion to deny costs and allow each party
to bear its own expenses. As Google's counsel acknowledged at the
last hearing, district courts have broad discretion under Fed. R.
Civ. P. 54(d)(1) to deny costs. (6/20/12 Hearing Tr. at 15:11-13
("We understand it's within your Honor's discretion as to whether
to award any costs or not").) Denial of costs is particularly
appropriate where the issues are close, difficult, and of public
importance, and where the judgment is mixed.

This case presented landmark legal issues of first impression
pertaining to the copyrightability of application programming
interfaces ("APIs"). In its order dismissing Oracle's copyright
claim regarding the structure, sequence, and organization ("SSO")
of the 37 Java API packages, the Court grappled with complex issues
of copyright law, observing that "[n]o law is directly on point."
(ECF 1202 at 3:8.) At the Court's request, the parties submitted
many rounds of briefing, thoroughly covering all legal authorities
and factual questions pertinent to the issue of API
copyrightability. The Court acknowledged that deciding the issue
was "one of the toughest things I've ever had to do." (Trial Tr. at
1129:10-14.) The case was closely followed by the technology press,
reflecting the importance of the issues to the computer software
industry. This is exactly the type of case where costs should not
be awarded.

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The outcome of the case, moreover, was mixed. The jury agreed
with Oracle that Google infringed the SSO of the 37 Java API
packages, but was unable to reach a verdict on Google's fair use
defense. Judgment on Oracle's copyright claim was divided, with
Oracle prevailing on its claims for Google's code copying, but
Google prevailing with respect to the copying of the English
language descriptions in the API documentation and the
copyrightability of the SSO of the API packages after the Court's
ruling on the novel legal issues presented. On the patents, the
jury found for Google on infringement, but Google abandoned its
invalidity counterclaims and judgment on those was entered for
Oracle. Oracle also prevailed on two of Google's four equitable
defenses (the Court withheld ruling on the other two as moot). In
these circumstances, each party should bear its own costs.

Second, if any costs are awarded to Google, the Court should
deny Google's request for $2,900,349 in e-discovery costs, because
a party's entire e-discovery expense is not a proper taxable
cost under 28 U.S.C. § 1920 and Civil L.R. 54-3. The statute
allows recovery of "[f]ees for exemplification and the costs of
making copies of any materials where the copies are necessarily
obtained for use in the case." Google's Bill of Costs appears to
include every invoice from its e-discovery vendor, FTI Consulting.
The charges cover all processing of documents by FTI and all labor
of its personnel, with no attempt to separate the reasonable cost
of copying documents for production from the non-taxable costs of
services provided for Google's litigation convenience (such as
organizing and searching the productions). Because Google has
failed to identify its reasonable copying costs, the request for
$2,900,349 should be denied.

Third, if the Court awards any costs to Google, it should
nevertheless deny Google's request for $986,978, representing
Google's share of the fees and expenses charged by Dr. James Kearl,
the Court-appointed damages expert. The parties previously agreed,
and the Court ordered, that these costs would be borne "one half by
each party." (ECF 413 at 4:14-16.) Google's attempt to now shift
all of Dr. Kearl's fees and expenses to Oracle is contrary to that
agreement and order. In addition, even if that order did not
preclude Google's request for reimbursement of Dr. Kearl's fees and
expenses, the Court should exercise its discretion to deny that
request. As the Court previously found, Dr. Kearl's appointment was
appropriate given the

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fact that this case "is unusually complex and involves starkly
conflicting expert views on the subject of damages," and "[t]he
damages aspect of this controversy is particularly involved." (ECF
610 at 2:1-2, 13; see id. at 3:2-4; ECF 236 at 2:8-9) Under
these circumstances, each party should bear its own costs for the
court-appointed expert.

Usually what happens with bills of costs, by the way, is that the filer, in this case Google, gets some, but not all, of what it asked for, even when it won 100% across the board. And that's Oracle's alternative request, that the amount be reduced.

[Update: The judge has issued an order, giving Google until August 3rd to file a reply brief:

Pursuant to Civil L.R. 54-2, Oracle objects to Google's Bill of
Costs (ECF 1216) for the reasons stated below. In accordance with
Civil L.R. 54-2(b), Oracle met and conferred with Google in an
effort to resolve Oracle's objections, but the parties were not
able to reach agreement.

INTRODUCTION

Google seeks costs in the amount of $4,030,669, including what
appears to be the entire expense ($2.9M) of Google's electronic
document discovery vendor and Google's share of the fees of
court-appointed damages expert Dr. James Kearl ($986,978). Oracle
objects to Google's requested costs on three primary grounds:

First, because the key disputed issues concerning API
copyrightability were close, complex, without direct precedent, and
of great importance to the computer software industry, and neither
Oracle nor Google prevailed on all claims in this case, the Court
should exercise its discretion to deny costs and allow each party
to bear its own expenses. As Google's counsel acknowledged at the
last hearing, district courts have broad discretion under Fed. R.
Civ. P. 54(d)(1) to deny costs. (6/20/12 Hearing Tr. at 15:11-13
("We understand it's within your Honor's discretion as to whether
to award any costs or not").) Denial of costs is particularly
appropriate where the issues are close, difficult, and of public
importance, and where the judgment is mixed.

This case presented landmark legal issues of first impression
pertaining to the copyrightability of application programming
interfaces ("APIs"). In its order dismissing Oracle's copyright
claim regarding the structure, sequence, and organization ("SSO")
of the 37 Java API packages, the Court grappled with complex issues
of copyright law, observing that "[n]o law is directly on point."
(ECF 1202 at 3:8.) At the Court's request, the parties submitted
many rounds of briefing, thoroughly covering all legal authorities
and factual questions pertinent to the issue of API
copyrightability. The Court acknowledged that deciding the issue
was "one of the toughest things I've ever had to do." (Trial Tr. at
1129:10-14.) The case was closely followed by the technology press,
reflecting the importance of the issues to the computer software
industry. This is exactly the type of case where costs should not
be awarded.

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The outcome of the case, moreover, was mixed. The jury agreed
with Oracle that Google infringed the SSO of the 37 Java API
packages, but was unable to reach a verdict on Google's fair use
defense. Judgment on Oracle's copyright claim was divided, with
Oracle prevailing on its claims for Google's code copying, but
Google prevailing with respect to the copying of the English
language descriptions in the API documentation and the
copyrightability of the SSO of the API packages after the Court's
ruling on the novel legal issues presented. On the patents, the
jury found for Google on infringement, but Google abandoned its
invalidity counterclaims and judgment on those was entered for
Oracle. Oracle also prevailed on two of Google's four equitable
defenses (the Court withheld ruling on the other two as moot). In
these circumstances, each party should bear its own costs.

Second, if any costs are awarded to Google, the Court should
deny Google's request for $2,900,349 in e-discovery costs, because
a party's entire e-discovery expense is not a proper taxable
cost under 28 U.S.C. § 1920 and Civil L.R. 54-3. The statute
allows recovery of "[f]ees for exemplification and the costs of
making copies of any materials where the copies are necessarily
obtained for use in the case." Google's Bill of Costs appears to
include every invoice from its e-discovery vendor, FTI Consulting.
The charges cover all processing of documents by FTI and all labor
of its personnel, with no attempt to separate the reasonable cost
of copying documents for production from the non-taxable costs of
services provided for Google's litigation convenience (such as
organizing and searching the productions). Because Google has
failed to identify its reasonable copying costs, the request for
$2,900,349 should be denied.

Third, if the Court awards any costs to Google, it should
nevertheless deny Google's request for $986,978, representing
Google's share of the fees and expenses charged by Dr. James Kearl,
the Court-appointed damages expert. The parties previously agreed,
and the Court ordered, that these costs would be borne "one half by
each party." (ECF 413 at 4:14-16.) Google's attempt to now shift
all of Dr. Kearl's fees and expenses to Oracle is contrary to that
agreement and order. In addition, even if that order did not
preclude Google's request for reimbursement of Dr. Kearl's fees and
expenses, the Court should exercise its discretion to deny that
request. As the Court previously found, Dr. Kearl's appointment was
appropriate given the

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fact that this case "is unusually complex and involves starkly
conflicting expert views on the subject of damages," and "[t]he
damages aspect of this controversy is particularly involved." (ECF
610 at 2:1-2, 13; see id. at 3:2-4; ECF 236 at 2:8-9) Under
these circumstances, each party should bear its own costs for the
court-appointed expert.

ARGUMENT

I. THE COURT SHOULD EXERCISE ITS DISCRETION TO DENY COSTS AND
REQUIRE EACH PARTY TO BEAR ITS OWN EXPENSES

Denial of costs is proper where (1) the issues were especially
close and difficult, (2) the case presented a landmark issue of
national importance, (3) the judgment was mixed, or (4) the losing
party litigated in good faith. See Quan v. Computer Scis.
Corp., 623 F.3d 870, 888-89 (9th Cir. 2010) (listing proper
grounds for denying costs); Amarel v. Connell, 102 F.3d
1494, 1523 (9th Cir. 1996) ("[i]n the event of a mixed judgment,
however, it is within the discretion of a district court to require
each party to bear its own costs"). Any one of these grounds could
be a basis for denying costs — in this case, all four are
present. Because this case presented novel and difficult legal
issues, had broad implications for the computer software industry,
resulted in a mixed judgment, and was litigated in good faith, the
Court should exercise its discretion to deny costs, as other courts
have done in analogous circumstances.

claims for declaratory relief, but lost on its damages claims.
Id. at *1. In denying costs, the court explained:

This Court's rulings resulted in a mixed judgment with both
sides prevailing on issues. In addition, this action involves
difficult insurance coverage and defense issues which the parties
litigated in good faith. The issues required this Court's
significant consideration. Given the mixed judgment and good faith
dispute over difficult issues, an award of costs is unwarranted and
each side is to bear its respective costs.

Id. at *2. See also K-S-H Plastics, Inc. v. Carolite,
Inc., 408 F.2d 54, 60 (9th Cir. 1969) (affirming denial of
costs based on "the complexity of the case, the extensive discovery
made by the parties, and the limited relief granted to K-S-H");
Association of Mexican-American Educators v. California, 231
F.3d 572, 592 (9th Cir. 2000) (affirming denial of costs where the
issues were "close and difficult" and "of substantial public
importance").

Similarly, the Federal Circuit in Ruiz affirmed the
district court's decision to deny costs "where neither party
prevailed sufficiently to require an award of costs." Ruiz,
234 F.3d at 670. Plaintiffs in that case succeeded on their claim
for declaratory judgment of patent invalidity, but defendants
prevailed on several other claims. Id. at 662. Given the
mixed judgment, the district court declined to award costs to
either party. The Federal Circuit affirmed, noting that courts have
broad discretion to deny costs in such situations. Id. at
670. See also Champion Produce, Inc. v. Ruby Robinson Co.,
342 F.3d 1016, 1023 (9th Cir. 2003) (affirming district court's
decision to deny costs where plaintiff recovered substantially less
than sought and defendant succeeded on affirmative defenses).

The present case involved difficult, novel legal issues of great
importance to the computer software industry. Oracle claimed that
Google infringed its copyrights by incorporating the selection,
structure, sequence and organization of 37 Java API packages into
the Android platform. By the time of trial, the bulk of Oracle's
asserted damages were tied to this copyright claim. The jury found
that Google infringed the SSO of the 37 Java API packages, but it
deadlocked on Google's fair use defense. (ECF 1089 at 1.) Before
that defense could be re-tried to another jury, the Court decided
the seminal legal issue of the case — whether the SSO of the
Java API packages was copyrightable in the first instance.

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The Court had previously grappled with that issue in ruling on
Google's motion for summary judgment on copyright infringement.
(ECF 433.) In a ruling largely denying Google's motion, the Court
declined to hold that the 37 Java API packages were unprotectable,
deferring decision on that issue until the technical facts could be
presented at trial. (Id. at 9-10.) Prior to and during the
trial, the Court sought additional information from the parties
regarding the relevant legal authorities and the nature of the Java
APIs. (See, e.g., Trial Tr. at 882:4-7, 921:1-922:6.) The
parties submitted many rounds of briefing (amounting to several
hundred pages), extensively surveying all available law related to
API copyrightability. (See ECF 778, 780, 823, 824, 833, 852,
853, 859, 860, 887, 897, 898, 900, 955, 956.)

The Court repeatedly acknowledged the difficulty, complexity,
and closeness of the copyrightability issues. (See, e.g.,
Trial Tr. at 7:11-16, 882:20-25, 1129:10-14, 1376:14-20,
3435:15-18.) At the very start of trial, the Court noted:

One of the issues that the judge has got to decide in this case
is whether or not the 37 APIs are copyrightable or not. I think
this is the most interesting problem. I've read all of those briefs
that you've submitted, and I requested a lot of those briefs myself
because I don't know the answer to this problem yet.

(Trial Tr. at 7:11-16.) Later in the proceeding, the Court
stated:

I find this to be one of the toughest things I've ever had to
do. The law is tough. It's not like the - this is harder than a
patent case because this copyright part on the computer thing is
not settled. And then the facts are very hard. So this is a tough
problem for the judge.

(Id. at 1129:10-14.) In the Court's ruling, the Court
noted that the issue of API copyrightability was one of first
impression and that "[n]o law is directly on point." (ECF 1202 at
3:8.) The case was closely followed in the legal, business, and
technology press, with the issue of API copyrightability receiving
much attention. In difficult, close, and important cases like
these, it is appropriate for the court to deny costs. See
Endurance, 2011 WL 6012213 at *2.

Furthermore, the judgment on the parties' various claims was
mixed, which further reinforces the propriety of requiring each
side to bear its own costs. As already noted, the jury found that
Google infringed the SSO of the 37 Java API packages, but was
unable to decide fair use. (ECF 1089 at 1.) The jury also found
Google liable for copying Oracle's rangeCheck code

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and sided with Oracle on one of the two special interrogatories
related to Google's equitable defenses. (Id. at 2-3.) The
jury found for Google on copying of the English-language
descriptions in the API documentation and the eight decompiled
files, but the Court subsequently directed a verdict for Oracle on
those eight files. Although Oracle stipulated to no damages arising
from the code copying, Google did remove the copied code from
Android as a result of this lawsuit. Judgment was ultimately
entered for Google on the 37 Java API packages based on the Court's
seminal ruling that the APIs were not copyrightable. With respect
to the '104 and '520 patents, judgment of non-infringement was
entered for Google, while judgment on Google's invalidity
counterclaims was entered for Oracle. (Id.) Judgment was
entered for Oracle on Google's affirmative defenses of waiver and
implied license. The remaining two defenses have yet to be decided.
The mixed judgment in this case supports a denial of costs.

Finally, Oracle litigated this case in good faith throughout.
Oracle helped to narrow the issues for trial by dropping asserted
patent claims and ultimately agreeing to withdraw five of the
original seven patents. Oracle simplified the lingering statutory
damages issue at the end of the case by agreeing to forego damages
for Google's code copying. The Court thanked the parties for the
extensive briefing supplied on the API copyrightability issues (ECF
1202 at 3:11-13), and praised the parties for efficiently managing
the presentation of evidence at trial.

For all of these reasons, the Court should exercise its
discretion to deny Google's request for costs.

II. IF ANY COSTS ARE AWARDED, THE COURT SHOULD DISALLOW
GOOGLE'S REQUESTED E-DISCOVERY COSTS

Even if the Court determines that costs are appropriate, Google
still bears the burden of demonstrating that its requested costs
are properly recoverable. "[T]he burden is on the prevailing
[party] to establish the amount of compensable costs and expenses
to which they are entitled. Prevailing parties necessarily assume
the risks inherent in a failure to meet that burden." In re
Ricoh Co., Ltd. Patent Litig., 661 F.3d 1361, 1367 (Fed. Cir.
2011) (quoting English v. Colo. Dep't of Corr., 248 F.3d
1002, 1013 (10th Cir. 2001)). To be recoverable, a particular
expense must fall into one of the categories of costs statutorily
authorized under 28 U.S.C.

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§ 1920. Romero v. City of Pomona, 883 F.2d 1418,
1428 (9th Cir. 1989) ("notwithstanding the district court's
discretionary authority under Federal Rule of Civil Procedure 54(d)
to refuse to tax costs in favor of a prevailing party, a district
court may not rely on its 'equity power' to tax costs beyond those
expressly authorized by section 1920") (emphasis in original),
overruled on other grounds by Townsend v. Holman Consulting
Corp., 929 F.2d 1358 (9th Cir. 1991). Under 28 U.S.C. §
1920, the Court may tax the following costs:

(1) fees of the clerk and marshal;
(2) fees for printed or electronically recorded transcripts
necessarily obtained for use in the case;
(3) fees and disbursements for printing and witnesses;
(4) fees for exemplification and the costs of making copies of any
materials where the copies are necessarily obtained for use in the
case;
(5) docket fees under section 1923 of this title;
(6) compensation of court appointed experts, compensation of
interpreters, and salaries, fees, expenses, and costs of special
interpretation services under section 1828 of this title.
28 U.S.C. § 1920.

With respect to category 4, Civil L.R. 54-3(d)(2) further
provides: "The cost of reproducing disclosure or formal discovery
documents when used for any purpose in the case is allowable."
However, the requesting party must clearly and specifically
identify the costs of physically reproducing discovery
documents, as distinct from other discovery costs. In Ricoh,
the Federal Circuit vacated an award of costs from this district
because the prevailing party's bill was insufficiently detailed.
The court was "unable in many instances to determine what documents
were being reproduced and to which side the copies were ultimately
provided." 661 F.3d at 1368. Under Ninth Circuit authority,
exemplification and copying costs are limited to "the physical
preparation and duplication of documents, not the intellectual
effort involved in their production." Zuill v. Shanahan, 80
F.3d 1366, 1371 (9th Cir. 1996); Romero, 883 F.2d at 1428.
Following this authority, the court in Gabriel Techs. Corp. v.
Qualcomm Inc., No. 08 CV 1992 MMA, 2010 WL 3718848, at *11
(S.D. Cal. Sept. 20, 2010), denied costs of $1.5M expended on an
e-discovery

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vendor, concluding that "the $1.5 million fee to engage a
consultant to assist with e-discovery productions is not
recoverable."

Cases from this district have applied the same rule. In
Campbell v. National Passenger R.R. Corp., No. C 05-5434 CW,
2010 WL 582754 at *2 (N.D. Cal. Feb. 18, 2010), the court allowed
amounts that were specifically identified as costs of reproducing
discovery documents, but denied amounts that were not so
identified:

[T]he record is not clear on the purpose for many of the copies
Deely seeks to tax. Although Deely provides over thirty pages of
print and copy logs to support his Bill of Costs, a majority of the
copies have no description as to their purpose. Only seven
transactions, totaling 883 pages and charged at $0.20 per page, are
described as relating to discovery.

Id. In Competitive Techs. v. Fujitsu Ltd., No.
C-02-1673 JCS, 2006 WL 6338914, at *7 (N.D. Cal. Aug. 23, 2006),
the court denied costs where the requesting party did not provide
sufficient detail to show that certain copies "were necessarily
obtained for use in the case rather than for the convenience of
counsel." In Computer Cache Coherency Corp. v. Intel Corp.,
No. C-05-01766 RMW, 2009 WL 5114002, at *4 (N.D. Cal. Dec. 18,
2009), the court held that certain e-discovery costs
(Bates-numbering and electronic scanning) were recoverable as
reproduction costs, while other costs (such as OCR and metadata
extraction) were not recoverable, as they were "merely for the
convenience of counsel." See also Synapsis, LLC v. Evergreen
Data Sys., Inc., No. C 0501524 JF (RS), 2007 WL 2501614, at *1
fn.4 (N.D. Cal. Aug. 30, 2007) (denying reproduction costs that
were not specifically identified as related to discovery
documents).

Google appears to be seeking the entirety of its e-discovery
expenses in this case, in the amount of $2,900,349. From its
itemized list, these expenses include all costs billed by Google's
e-discovery vendor, FTI Consulting, including document processing
and handling expenses, hardware expenses, shipping costs, and
personnel costs. While some of these expenses may have been
necessary for physical reproduction purposes, some of them
surely reflect the "intellectual effort" of organizing, searching,
and analyzing the documents for Google's own case preparation
purposes. Google makes no effort to distinguish between the
necessary costs of physically copying documents for production and
costs expended for its own purposes.

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[REDACTED]

For these reasons, Google's request for reimbursement of $2.9M
in e-discovery costs should be denied.

III. IF ANY COSTS ARE AWARDED, THE COURT SHOULD DISALLOW
GOOGLE'S REQUESTED COSTS FOR THE FEES OF THE COURTAPPOINTED
EXPERT

Google also seeks as costs $986,978, its share of the fees of
court-appointed damages expert Dr. James Kearl. Even if Google were
entitled to some of its other costs as a prevailing party, this
request should be denied.

On August 30, 2011, the Court appointed Dr. Kearl as an
independent damages expert pursuant to Federal Rule of Evidence
706. (ECF 374.) In that order, the Court directed the parties and
counsel for Dr. Kearl to "draft a proposed order describing the
scope of Dr. Kearl's assignment and the procedures by which the
parties will pay for his work and expenses." (ECF 374 at 1:20-22.)
On September 8, 2011, having met and conferred, the parties jointly
submitted a proposed order which expressly provided that Dr.
Kearl's "professional fees and expenses will be paid to Mr. Cooper,
one half by each party within in [sic] thirty
days of receipt of each of his monthly invoices." (ECF 407 at
4:14-16 (emphasis added)). The Court adopted that division of

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costs in an order signed the next day. (ECF 413 at 4:14-16). In
its memorandum opinion explaining the reasons for appointing Dr.
Kearl, the Court repeated that, having been warned that they would
be responsible for the fees and expenses of the Rule 706 expert,
neither party had objected, and the parties had in fact agreed to
split those costs:

Here, the parties were warned in July 2011 that they would be
required to pay the costs of any expert appointed pursuant to FRE
706 (Dkt. No. 236). The September 2011 order detailing Dr. Kearl's
assignment, which counsel for both sides helped Attorney Cooper
draft, provided that each party would pay one half of Dr.
Kearl's monthly bills. The parties also reserved the right
to negotiate reductions in Dr. Kearl's bills through Attorney
Cooper, who was tasked with coordinating all payment matters (Dkt.
No. 413 at 3). This arrangement was agreeable to counsel for
all parties and the expert.

(ECF 610 at 5:256:3 (emphasis added).) Having previously agreed
to pay one half of Dr. Kearl's fees and expenses, Google cannot now
attempt to claim those fees and expenses as costs. Oracle
acknowledges that under Fed. R. Evid. 706, the parties are to pay
the court-appointed expert in the proportion that the court
directs, and that compensation "is then charged like other costs."
Fed. R. Evid. 706(c)(2). Here, however, the parties stipulated to a
specific division of costs. That agreement is binding. In
A.H.D.C. v. City of Fresno, No. CIV-F-97-5498 OWW, 2004 WL
5866234, at *9 (E.D. Cal. Oct. 1, 2004), the district court
rejected the prevailing City's claim for trial transcript
costs:

Instead of stipulating that the cost of trial transcripts would
be taxable, the parties entered into an agreement to split the
costs 50-50. [citation]. As Plaintiffs have cited, such an
arrangement is considered an agreement to share in the costs unless
the parties stipulate otherwise.

The City of Fresno appealed that ruling, which the Ninth Circuit
expressly affirmed. See A.H.D.C. v. City of Fresno, 433 F.3d
1182, 1199 (9th Cir. 2006). See also Frigiquip Corp. v.
Parker-Hannifin Corp., 75 F.R.D. 605, 613 (W.D. Okla. 1976)
("From the information before the Court, it seems that as the
agreement between the parties apparently did not provide for the
recovery of the prevailing party's share of the cost of
transcription, the parties intended said agreement to constitute a
final settlement of the burden of transcript expenses."). Notably,
the courts in AHDC and Frigiquip enforced the
parties' stipulations to split trial transcript costs even

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though the cost of transcripts is recoverable under 28 U.S.C.
§ 1920(2). Google should also be held to its stipulation.

Aside from this agreement, the Court should exercise its
discretion to deny costs for Google's share of Dr. Kearl's fees,
given the complexity and novelty of the damages issues in this
case, and the fact that the Court appointed Dr. Kearl in response
to the damages positions taken by Google as well as Oracle.

As explained above, denial of costs is proper where the issues
are complex or novel. See Quan, 623 F.3d at 888-89 (9th Cir.
2010). In this case, the Court repeatedly acknowledged the
complexity of the damages issues in particular, and expressly
relied on that complexity in deciding to appoint Dr. Kearl. (ECF
610 at 2:1-2 (describing this action as "unusually complex");
id. at 2:11-12 ("this order finds the obvious, namely that
the disputed facts span several fields of computer science and
involve complex technologies and products"); id. at 2:13
("The damages aspect of this controversy is particularly
involved."); id. at 3:2-4 ("In light of the parties'
extremely divergent views on damages and the unusual complexity of
the damages aspect of this case, an independent economic expert was
needed to aid the jury.").) See Leesona Corp. v. Varta
Batteries, Inc., 522 F. Supp. 1304, 1312 n.21 (S.D.N.Y. 1981)
(declining to award costs of Rule 706 expert in complex patent
case).

Further, the Court was clear in its orders that it appointed Dr.
Kearl in response to the damages positions taken by both parties,
not just Oracle. ECF 231 (Transcript of July 21, 2011
Daubert hearing) at 31:20-22 (Court describing Google
damages argument as "ridiculous"); id. at 32:4-5 (Court
stating that "See, you are both just asking for the moon, and you
should be more reasonable.")); ECF 236 at 2:8-9 (Court order
stating that the assistance of the Rule 706 expert would be
"particularly useful because both sides have taken such extreme and
unreasonable positions regarding damages in this action"); ECF 610
at 2:1-2 (describing "starkly conflicting" views on damages as
warranting appointment of Rule 706 expert); id. at 2:28
(noting that Google argued that damages should be zero).) Under
these circumstances, in which the Court found a Rule 706 expert
necessary because of the unusual complexity of the damages issues
and the extreme divergence of the parties' positions, the parties
should bear their own costs for Dr. Kearl.

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CONCLUSION

Because this case involved difficult, landmark legal issues of
first impression, resulted in a mixed judgment, and was litigated
in good faith, the Court should exercise its discretion to deny
costs and require each party to bear its own expenses. If any costs
are allowed, (1) Google's request for $2.9M in e-discovery costs
should be denied, as Google has failed to separate the reasonable
costs of physically copying production documents from the costs
incurred for Google's purposes, and (2) Google's request for
$986,978 in court-appointed expert witness costs should be denied,
as Google agreed to pay those costs, and in any event, the Court
should exercise its discretion to deny those costs, given the
complexity and novelty of the damages issues and the extreme
divergence of both parties' positions on damages.